Reuters

Egypt says in talks with IOC for $9 billion refinery

11 December 2007

By Summer Said

DUBAI (Reuters) - Egypt is in talks with India's top state-run refiner Indian Oil Corp to jointly build a $9 billion refinery and petrochemical complex in the north African nation, its Oil Minister confirmed on Tuesday. "We are in talks with IOC to build a refinery and a mega petrochemical complex," Sameh Fahmi said. "We've already asked them to cooperate with the Egyptian General Petroleum Corp to prepare a report on the project," he told Reuters by telephone from China. The estimated value of the project is $9 billion, the minister said.

IOC's business development director, B. M. Bansal, told Reuters on Monday that the demand/supply situation and investment were yet to be worked out. A detailed report on the commercial viability of the project would only be ready by mid-2010, based on which the Indian firm will decide on an investment, Bansal said.

A senior Egyptian oil ministry official said that EGPC is expected to form the initial joint venture with IOC in the first quarter of 2008. "The final decision is likely to be reached before the end of next year...the two sides are very keen on going ahead with a project, but issues like finance and location usually take time," the official said.

The Economic Times newspaper of India on Monday reported that IOC and EGPC would build the refinery and petrochemicals complex near Gamasa or Port Said. Mukesh Rohatgi, chairman of state-run Engineers India Ltd (EIL) told reporters in New Delhi that the firm hopes to conduct a feasibility study for the project, which will produce an estimated 180,000-300,000 barrel per day. But the Egyptian official said EGPC and India's IOC hope to build 200,000 bpd project, which can be expanded to 350,000 bpd if there is enough demand in the international market.

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